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Saturday, August 20, 2011

Set a Family Budget Easily By Tracking Expenses

Small expenses can equal a big chunk of a families’ budget. When you spend a few dollars at the movie theater or have dinner out once or twice a week, those seemingly minor expenses can quickly accumulate into a lot of money. Often, we don’t realize how much until we actually write it down.

A great first step when you get ready to set a family budget is to journal your daily expenses. This can feel like a time consuming and tedious task but the benefits far outweigh any frustration.

All you need to do is purchase a small note pad that you can keep either in your handbag or your pocket along with a pen. Whenever you purchase anything, you jot it down on the note pad. It doesn’t matter if it’s something as insignificant as a package of chewing gum or a bottle of water. You must mark down the item, the time of day you purchased it and the price. Do this all day, including everything you spend money on.

When it’s time to sit down and set a family budget, each family member can present their note pads. This way all money being spent can be accounted for. Doing this enables the person who is responsible for the budget to get a clearer view of what money is being spent on. Making an effort to journal expenses also provides the family an opportunity to review their expenses and determine what non-essentials are soaking up resources.

One area where many families spend a great deal of money without realizing it is on convenience or fast foods. Stopping at a corner store to purchase a sandwich each day can add up to a substantial amount of money over a month. The same can be said for items such as soda or juice from a vending machine. On average, these items cost several times more when coming from a vending machine, than they do if they are purchased at a grocery store in the form of a dozen or two dozen carton. If you add those savings up over the period of a month and multiply that amount by four family members, that’s a nice sum of money.

Taking a few days to keep track of daily expenses is invaluable information when it comes time to set a family budget. It puts a spotlight on unnecessary expenses. Armed with this arsenal of information any family can find ways to save money. For instance, if your child is purchasing a candy bar on their way home from school each day, buy them in bulk and keep them handy so they can grab one before they leave for the day. The same can be said with bottled water. Buying a case cuts the cost per bottle substantially and if you stock them in the refrigerator, they made for a cool and cheap treat.

Investing a few minutes to write down what you’ve purchased can save a good deal of money each year. It’s a task that every family member can take part in and also reap the financial rewards from.

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